An Insurance Company Will Insure a $75,000 Particular Automobile Make

question 22

Multiple Choice

An insurance company will insure a $75,000 particular automobile make and model for its full value against theft at a premium of $1500 per year. Suppose that the probability that this particular make and model will be stolen is .0075. Find the premium that the insurance company should charge if it wants its expected net profit to be $2000.

• A) $1437.50
• B) $2551.25
• C) $2562.50
• D) $2062.50

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Definitions:

OD Strategy

Organizational Development Strategy involves a planned, organization-wide effort to increase an organization's effectiveness and viability.

Reengineering

The radical redesign of business processes to achieve dramatic improvements in productivity, cycle times, and quality, often involving the use of technology.

Pulse Survey

A quick, frequent survey designed to capture the immediate sentiments or feedback of a group, often used in the context of employee engagement.

Ford Motor Company

An American multinational automaker founded by Henry Ford, known for revolutionizing vehicle manufacturing through the use of assembly lines.